California Court Voids Nonsolicit Agreement, Defeats Trade Secret Claims and Awards Attorneys’ Fees to Defendants

A California Court of Appeal concluded that what appeared to be a standard nonsolicitation of employees provision was, in fact, an unenforceable noncompete that prevented its former employees from carrying out their chosen profession. The Court of Appeal in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. upheld summary judgment in favor of employee defendants and their employer defeating an 11 count complaint that asserted claims of breach of contract, misappropriation of trade secrets, interference with prospective economic advantage, aiding and abetting misappropriation of trade secrets, and unfair business practices after four of AMN’s recruiters were hired by Aya and recruited other of AMN’s employees to work for Aya. In addition, the Court of Appeal upheld an injunction against the former employer from attempting to enforce such agreements in the future and awarded the defendants $190,000 in attorneys’ fees.